The Elder-Beerman Stores Corp. reported a net loss of $2.5 million or $0.22 per diluted share for the first quarter ended May 3, 2003, versus a net loss of $18.6 million or $1.64 per diluted share in the same period in 2002. Before the effects of changes in accounting principles, the company reported a loss of $2.5 million or $0.22 per diluted share for the first quarter 2003, versus a loss of $3.5 million or $0.31 per diluted share in 2002, a 29 percent improvement over 2002 operating results.

Net sales for the quarter decreased 7.2 percent versus last year to $131.1 million. Comparable store sales decreased 7.7 percent.

Bud Bergren, Elder-Beerman’s president and CEO, stated, “We are pleased with the improvement in our first quarter results. We continue to make progress in the key areas of productivity and expense management. Because we remained disciplined and focused on these areas we were able to improve bottom line performance and reduce long-term debt by 20 percent over last year’s first quarter.”

Bergren continued, “Along with our competitors and peers, sales were difficult in the first quarter, due to unseasonable weather, economic uncertainty and the war in Iraq. We continue to manage our business through this environment.

“Our new-format stores continue to perform well. As a group, the new-format stores showed positive sales growth.

“In the first quarter we celebrated the successful grand opening of our De Kalb, Illinois store, our 11th new format store. We announced the November 2003 opening of our Muscatine, Iowa store, marking our expansion into a new state. We also closed a suburban Cincinnati store that did not fit into our strategy of locating stores in smaller to midsized markets where we can be a dominant retail presence.”

Changes in Accounting Principles – Last Year (2002)

First quarter 2002 results include a cumulative effect of an accounting change related to the company’s adoption of the Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets.” Elder-Beerman also changed its method of accounting for net actuarial gains and losses associated with its defined benefit plans, accounted for in accordance with Statement of Financial Accounting Standards No. 87 “Employers Accounting for Pensions.” The cumulative effect of these changes in accounting principles in 2002 was a non-cash after-tax charge of $15.1 million or $1.33 loss per diluted share.

On May 16, 2003, Elder-Beerman announced that it had recently received unsolicited expressions of interest relating to the possible acquisition of the company. It also stated that it entered into discussions, on an exclusive basis and for a limited period of time, with one of the parties concerning the possible sale of the company and that there can be no assurance that these discussions will result in any transaction involving the company. These discussions are continuing. The company does not anticipate having any additional comment on this subject at its first quarter earnings conference call today.

           Condensed Consolidated Statements of Operations
           (Dollars in thousands, except per share amounts)

                                13-weeks ended       13-weeks ended
                              May 3, 2003 % Sales  May 4, 2002 % Sales
                              ----------- -------  ----------- -------
  Net sales                   $  131,052   100.0%  $  141,166   100.0%
  Financing                        6,862     5.2%       7,158     5.1%
  Other                              699     0.5%         688     0.5%
                              ----------- -------  ----------- -------
Total revenues                   138,613   105.8%     149,012   105.6%
                              ----------- -------  ----------- -------

Costs and expenses:
  Cost of merchandise sold,
   occupancy, and buying
   expenses                       97,140    74.1%     105,145    74.5%
  Selling, general,
   administrative, and other
   expenses                       37,960    29.0%      41,495    29.4%
  Depreciation and
   amortization                    4,917     3.8%       4,971     3.5%
  Interest expense                 2,463     1.9%       2,840     2.0%
                              ----------- -------  ----------- -------
    Total costs and expenses     142,480   108.7%     154,451   109.4%
                              ----------- -------  ----------- -------

Loss before income tax
 benefit                          (3,867)   -3.0%      (5,439)   -3.9%

Income tax benefit                (1,392)   -1.1%      (1,958)   -1.4%
                              ----------- -------  ----------- -------

Loss before cumulative effect
 of changes in accounting
 principles                       (2,475)   -1.9%      (3,481)   -2.5%

Cumulative effect of changes
 in accounting principles              -     0.0%     (15,118)  -10.7%
                              ----------- -------  ----------- -------

Net loss                      $   (2,475)   -1.9%  $  (18,599)  -13.2%